1011583552080 | Legal database

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Edited version of private ruling

Authorisation Number: 1011583552080

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Ruling

Subject: GST and activity statement

Question

Do you need to complete an activity statement each quarter?

Advice/Answer

While you remain registered for GST, you need to complete an activity statement.

Relevant facts

You are registered for GST and report quarterly.

You no longer have any business other than the leasing of a commercial property.

The rent you receive from your commercial property including outgoings is less than $75,000 per annum.

You are currently an employee and tax is deducted by your employer.

Reasons for decision

Section 31-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) provides that if an entity is registered or required to be registered for GST, the entity must give to the Commissioner a GST return for each tax period.

The activity statement is used to report and pay a number of tax obligations. The activity statement is used to account for GST on taxable supplies that an entity makes (if any) and to claim any GST credits to which the entity is entitled.

An entity is required to be registered for GST if the entity is carrying on an enterprise and its GST turnover is $75,000 or more (or $150,000 or more for non-profit organisations). If the entity is carrying on an enterprise but has a GST turnover less than $75,000 (or $150,000 for non-profit organisations), the entity can choose to register for GST.

An enterprise includes an activity or series of activities done in the form of a business; or on a regular or continuous basis, in the form of a lease, licence or other grant of an interest in property. However, enterprise does not include activities carried on as an employee.

As you are leasing a commercial property on a continuous or regular basis then you are carrying on an enterprise. You have advised that your GST turnover is below $75,000. Therefore, even though you are carrying on an enterprise, because your annual turnover does not meet the registration turnover threshold you are not required to be registered for GST. However, you have chosen to remain registered for GST.

As you are currently registered for GST, you must lodge your activity statement on or before the due date following the end of each quarterly tax period even if supplies/acquisitions are nil in that quarter.

Annual reporting

As you are currently voluntarily registered for GST, you may be eligible to elect to adopt an annual tax period, so that you can report and pay GST on an annual basis rather than quarterly.

For further information, refer to the publication Report your GST once a year (Nat 12906).

Cancellation

Under subsection 25-55(1) of the GST Act, the Commissioner must cancel an entity's GST registration if:

§ the entity applies for cancellation of registration in the approved form;

§ at the time the entity applies for cancellation of registration, the entity has been registered for at least 12 months and

§ the Commissioner is satisfied that the entity is not required to be registered.

As you are not required to be registered for GST, you can have your GST registration cancelled under subsection 25-55(1) of the GST Act.

You should note that as you are continuing your enterprise, if at sometime in the future you meet the registration turnover threshold, you will be required to re-register under section 23-5 of the GST Act.

You should also note that where you cancel your GST registration and still hold assets for which you have claimed GST credits, you may have an increasing adjustment in your concluding tax period (section 138-5 of the GST Act).

Where you cancel your GST registration, your activity statement will no longer contain a GST section. However, you will need to keep lodging activity statements if you have pay as you go income tax instalments obligations.

To cancel your GST registration you can either:

§ phone us on 13 28 66 between 8.00am and 6.00pm, Monday to Friday or

§ complete an Application to cancel registration (NAT 2955)

For further information on cancelling your GST registration, refer to the publication Leaving the GST system (Nat 14829).

The publications referred to above are available from the ATO website www.ato.gov.au

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